Victorian WorkCover Authority v I R Cootes Pty Ltd [2001] VSCA 85

2. From 1985, when the Accident Compensation Act 1985 (Vic) (the "ACA") became law, until 1993, when the Accident Compensation (Work Cover Insurance) Act 1993 (the "WCIA") was introduced, employers such as I.R. Cootes Pty. Ltd. (the respondent) were required to pay an "accident compensation levy" to the then Accident Compensation Commission (the "ACC") in accordance with Part VII of the ACA or, following the introduction of the Accident Compensation (Work Cover) Act 1992 (Act No.67 of 1992), to the Victorian Work Cover Fund maintained by the Victoria Work Cover Authority (the "VWA"). It was by means of such levies that the workers' compensation scheme in this State was funded. The amount of levy payable by an employer depended, in part, upon the "industry classification" assigned to the employer. The respondent was at all relevant times an employer. In 1985 it registered as a relevant employer by completing a "registration form" dated 27 June 1985. In its application for registration it described the main activity undertaken by it at its premises at 6-8 Pascal Road, Seaford as "Distribution of Petroleum Products" and described "the major type of goods ... to which the main activity relates" as "LPG, petrol, bitumen". In accordance with regulations passed pursuant to the ACA, the ACC assigned to the respondent an "industry classification" in accordance with which its annual levy was calculated. The "classification" so assigned, and noted upon the registration application, was "F4741J" which the regulations disclosed was the classification given to a "Petroleum Products wholesaler". Thereafter, until 30 June 1993, the respondent paid its annual levy to the ACC and VWA in accordance with statements rendered on the basis of this classification.

5. As from 1 July 1993, the scheme for the payment of levies by employers changed. It was replaced by a scheme of regulated accident compensation insurance instituted by the WCIA. Thereafter the payment of levies, formerly calculated by reference to Part VII of the ACA and its subordinate regulations were replaced by a requirement (imposed by the WCIA) that the employer obtain and maintain a statutory policy of insurance against Work Cover liability, with the premiums to be paid therefor being calculated and fixed in accordance with "Premiums Orders" promulgated from year to year pursuant to the WCIA.

8. In accordance with its statutory obligations, the respondent, in 1993, appointed Zurich Workers Compensation Pty. Ltd. as its authorized Work Cover insurer. At some time thereafter, the second appellant (QBE Workers' Compensation (Victoria) Ltd) assumed that role. Because, by amendments made to the WCIA in 1998 (Act No.81 of 1998), all the rights and liabilities of authorized insurers were transferred to the VWA, the judgment, from which this appeal comes, was given only against the VWA. Accordingly, the parties agreed that QBE was not a necessary party to the appeal and, by consent, the Court granted leave to amend the Notice of Appeal to exclude it as a party. After the introduction, in 1993, of the new scheme, the respondent was not required to apply for new registration, or to provide further information to the insurer, and the premium appears to have been assessed by reference to the "industry classification" which had been applied previously by the ACC. Thus the relevant insurers of the respondent adopted the same classification (namely "F4741J-Petroleum Products Wholesaler") in calculating the premiums which were imposed upon, and were paid by, the respondent. Accordingly, the respondent paid premiums so calculated for the years 1993/4 and 1994/5. It appears that, in or about July or August of 1995 the VWA, pursuant to its statutory powers, employed auditors - Pannell Kerr Forster - to conduct "premium audits" of, inter alia, the respondent. In its report to VWA, the auditor stated that, having reviewed the nature of the business conducted by the respondent, in its view the industry classification (F4741J) was inappropriate and that the correct one ought to be "in the road transport classification". The auditor recommended "G5111J" which was appropriate to "long distance interstate road transport" which carried a higher premium than that applicable to the pre-existing classification. Thus, for the 1995/6 year, the insurer issued to the respondent an "initial premium notice" based upon a "G.5112K" classification, which was appropriate to "Long Distance Intrastate Freight Transport classification". This differed from the "inter-state" classification recommended by the auditor. The difference apparently was the result of further enquiries made by VWA, and accordingly that body instructed the insurer to demand a premium on the basis which it regarded as appropriate.

11. On 30 January 1996, QBE advised the respondent that its "industry classification" had changed "effective from 1995/6 financial year only", but VWA decided that the re-classification ought to apply "effective as from 1 July 1993" and, on 15 July 1996, advised QBE that:-

(a) the auditors considered that the respondent had been incorrectly classified since 1985 and that the correct classification should be "G5112K - Long Distance Intrastate Road Freight Transport"; and

(b) QBE should amend the effective date of change of classification to 1 July 1993.

Not surprisingly, this action on the part of VWA and the insurer met with spirited resistance from the employer, not only on the basis (as was contended) that VWA and the insurer had no power to alter the industry classification "retrospectively" and, thus, to impose "premium adjustments" increasing the respondent's obligations for past years, but also because the classification which VWA sought to impose was inappropriate and that the former classification was the appropriate one because it "most closely corresponded to the predominant activity" of the respondent. Much correspondence passed between an expert employed by the respondent (Chris Knight & Associates) and the relevant officers of VWA seeking to convince VWA that the nature of the respondent's business (namely the use of specialized tankers and drivers to carry LPG to "nominated outlets" at its own risk) was not to be equated with the business of an intra-state road freight transport business but was much more closely aligned with a petroleum product distribution business on a wholesale basis. It was further contended that the VWA, or the insurer, had no power to impose "adjusted premiums" in respect of years prior to the decision that a new classification should apply; and that because that decision was not formally made, nor communicated until July 1996, there was no liability imposed upon the respondent to pay adjusted premiums until the year commencing July 1996. The respondent pointed out that, over the years, officers of the ACC had frequently visited the business premises of the respondent and had never suggested that the classification which it was according to the respondent's business was other than appropriate.

17. These exhortations by the respondent to VWA "fell on deaf ears". On 30 April 1997 the VWA's manager of its "Employer Audit Program" wrote to Chris Knight Associates saying, inter alia:-

"On 20 January 1997, the Authority issued the result of the review following receipt of an application, dated 23 September 1997 (sic) from the employer's representative for review of the audit result. That response, by the Authority, contained advice regarding the employer's rights to a further determination in a court of competent jurisdiction, if that were the employer's chosen course. In the circumstances, the Authority is not prepared to conduct a further review on the same audit."

Further correspondence ensued, in the course of which the respondent contested VWA's power to "back-date" its adjusted premiums to 1 July 1993 again asserting that, at all times, the respondent had acted bona fide - an assertion which appears not to have been in contest. The VWA simply asserted that, whereas under the ACA it might not have been appropriate to recover from an employer "adjusted levies" for years preceding the re-classification, its advice was that it was entitled to do so - at least from 1 July 1993 - pursuant to the scheme implemented by the WCIA.

22. Against that background, the respondent paid the adjusted premiums for the years 1993/4, 1994/5 and 1995/6, the total amount of which was $107,262.72. It paid those amounts "under protest" in December 1996, and took the matter to the County Court, by writ issued in March 1998, alleging that the additional premiums were levied in contravention of the provisions of the WCIA and the insurance policies issued pursuant to it. It claimed repayment of the sums involved as "monies had and received".

25. There were two main issues litigated before the trial judge. The first was essentially a factual issue; namely whether the "industry classification", which had been previously assigned to the respondent's business, was incorrect. The second - which depended upon the answer to the first - was whether the WCIA, the statutory policy and the "Premiums Orders", on their proper construction, empowered the appellants to "adjust" premiums for previous policy periods and to call upon the respondent to pay to them the difference between the premiums which had been fixed and paid for those policy periods and the amount of the "adjusted premiums".

28. The trial judge decided each of these issues in favour of the respondent employer. In respect of the issue relating to the appropriate "industry classification" his Honour had before him all the documentary evidence in the "Court Book" setting out, inter alia, the correspondence to which I have earlier referred; and the reasons of the auditor. He also had the evidence of Mr. Hatton, the respondent's secretary. The gist of this evidence is set out in the judgment of Phillips, J.A. at [50]-[52]. I shall not repeat it. The trial judge found that the product with which the respondent predominantly dealt was liquid petroleum gas (LPG) and dealt with it "in bulk". It was pumped into the respondent's specialized tankers from limited sources - namely Shell, Mobil, Elgas and Gogas - and distributed by those tankers to nominated "outlets" which were customers of the oil companies. However, as his Honour found, the respondent was more than just a carrier; it gave what was described as "full customer service". It was the respondent's task to determine the "needs" of the outlets to which it delivered the LPG and to calculate the quantity and frequency of the deliveries required by those outlets. The nature of the respondent's business, so his Honour concluded, was a "far cry" from that of a "long distance freight transporter" whether classified as "inter-state" or "intra-state". In his Honour's view, the nature of the respondent's business most closely corresponded to the "industry classification" which had traditionally been assigned to it since 1985 - namely "F4741J" - "Petroleum Products Wholesalers" which is stated by the relevant "Order" to consist, inter alia, of work places predominantly engaged in "retailing LPG (in bulk or containers) ..." and in respect of which a "predominant activity" is specified as including "LPG dealing (in bulk or in containers)". His Honour therefore concluded that:-

"In my opinion, the predominant activity of the [respondent] was `LPG dealing in bulk' and hence I consider that Work Cover (sic) correctly determined the [respondent's] industry classification in 1985 and that the premium demanded of it was not on the wrong footing."

32. In any event, his Honour rejected the submission which had been made by VWA that the WCIA and the insurance policy gave it and the insurer the power to "adjust" premiums for past policy periods as a consequence of "re-classification" of the respondent's industry. In the course of doing so, his Honour declined to accept the primary contention made to him on behalf of VWA that the statute obliged it to impose and collect the "correct" premium and that, having regard to his Honour's view that there was no express power to be found in the Act obliging it to collect "under paid" past premiums, a construction ought to be given to the relevant statutory provisions which would avoid a conclusion that it had an obligation to do so. His Honour reviewed the relevant provisions of the WCIA, the "Premium Orders" and the Statutory Policy and concluded that he could find no justification for upholding the contention made by VWA.

35. Furthermore, so his Honour concluded, the particular circumstances of this case, as he had found them to be, would preclude the insurer and VWA claiming the adjustments for past premiums, even if a general power to do so of the type contended for existed. That was because such a power had been exercised in favour of the respondent. The evidence demonstrated, to his Honour's satisfaction, that VWA had received the auditor's report in January 1996 and that, on 30 January of that year, the insurer had written to the respondent stating:

"I refer to telephone conversations with you on 29 January 1996 where we discussed the change in industry classification from Petroleum Products Wholesalers to Long Distance Interstate Road Freight."

The insurer then referred to Schedule 7.1 of the relevant "Premiums Order" and s.22 of WCIA and continued:

"Based on the above Schedule, your industry classification has changed effective from 1995/6 financial year only. You are therefore paying a total premium amount of $91,724.12 based on a rateable remuneration of $4.350 million ... ." (emphasis added)

His Honour took the view that this letter demonstrated that the insurer was exercising a discretion not to adjust the premiums for the years 1993/4 and 1994/5 and that, the insurer having decided not to do so, it was not open to VWA to "override" that decision.

43. On this appeal, counsel for VWA submitted that his Honour had erroneously decided the two major issues which were before him. They submitted that, on any view of the "Premiums Orders" for the relevant policy periods (and in respect of the three policy periods in dispute, the Orders were in substantially the same form) it was abundantly clear that the "predominant activity" carried on at the respondent's work-place "most closely corresponded" to industry classification G5112K (long-distance LPG intra-state transport by truck) and that his Honour was in error in concluding that the appropriate classification which had been assigned (namely F4741J) was "not on a wrong footing". Furthermore, it was submitted that his Honour was in error in holding that there was no power in the authorized insurer or VWA to adjust or re-calculate the premiums for the disputed policy periods and to claim the adjusted premiums for these years. It was contended that s.17(1) of the WCIA obliged the authorized insurer to fix and recover a premium "calculated in accordance with the methods specified in the relevant premiums order" because, by s.17(2) of the Act, it was provided that the insurer "must not demand or receive an amount for the issue or renewal of a ... policy which is different from the premium payable by the employer in accordance with the relevant premiums order". Thus, it was said that the insurer had a statutory obligation to recover the "correct" premium so calculated and that, once the court had determined that the appropriate "industry classification" during the relevant years was G5112K, it followed that the "correct premium" which the insurer was obliged to recover was one appropriate to that classification, and that no element of retrospectivity stood in the way of the statutory obligation to collect that premium. In any event, so the appellant submitted, s.26(4) of the WCIA operating in conjunction with the relevant provisions of the Premiums Orders, did provide a general power in the insurer or the VWA to "adjust" the premium in the manner which occurred and to claim the premium so adjusted from the respondent. It was further submitted that the insurer's decision to claim "adjusted premiums" on the basis that such claim was to be "effective only from the 1995/6 policy period" could not over-ride the statutory power found in s.26(4) to claim adjusted premiums for the 1993/4 and 1994/5 policy periods.

47. In respect of this issue, I have the misfortune to differ from my brethren. The appellant conceded that, if his Honour's conclusion as to the appropriate classification - namely F4741J; "Petroleum Products Wholesaler" - was open to him, then this appeal must fail. It was submitted, however, that his Honour's conclusion was an inference drawn from facts found or not in dispute, and that this Court is in as good a position as his Honour to draw such inference as those facts warrant[1]. In any event, so counsel submitted, his Honour's conclusion can be seen to be patently erroneous in the light of those facts. It was contended that he misled himself by going directly to the list of classifications in Schedule 9 of the relevant Premiums Order rather than first determining the nature of the "predominant activity" carried on in the respondent's workplace.

50. For my own part, I think these submissions are ungenerous to his Honour. Whether it is the insurer or the Court which is called upon to determine the appropriate premium, it is to be calculated in accordance with methods prescribed in the relevant Premiums Order (ss.15, 16 and 17 of the WCIA). At the heart of these "methods" is the determination of the "industry classification" which is to be applied to a particular business. Because the classifications are general and the business carried on by a particular employer is sui generis, the person making the determination is clearly required to form a value judgment as to which classification in Schedule 9 of the Premiums Order the predominant activity of the particular employer most closely corresponds (clause 7 of Schedule 1). That judgment necessarily involves an assessment of the "predominant activity" of the particular employer which is, itself, defined in the Order as "the activity of the employer that ... is the activity ... which contributes or is likely to contribute to the value of the ... services ... provided by the employer ...". So broad is the task assigned to the determiner that it necessarily involves a judgment upon which reasonable minds can or might reasonably differ. It is clear, as his Honour's reasons demonstrate, that the respondent's business was not simply the carriage of freight along intra-state highways. Its predominant activity, as was open to him to find, was far more sophisticated than that. The producers of LPG in Victoria relied upon the respondent to distribute their product in bulk in a manner which was the most efficient and profitable for them. The respondent was not engaged by the producers simply to carry specified consignments of the product to specified outlets. The true value of the service provided by the respondent to the producers was the "discretionary management" of the product by the respondent and its drivers which, when properly done, fulfilled the needs of nominated outlets and, at the same time, ensured that the supplier's product was most efficiently, economically and profitably distributed. On a view open to his Honour, the predominant activity of the respondent was the responsibility of establishing the volume of LPG to be supplied to the nominated outlets, the frequency of its delivery and the system in accordance with which such delivery took place. This required the respondent to develop systems which were most apt to maintain supplies at each "outlet" at appropriate levels so that those outlets had sufficient levels of product to meet their various demands. The drivers were totally responsible for outlets within defined "sectors" and, through their own experience, were required to so manage the distribution of the product that, at the end of any given day, the outlets within the sector had their necessary supplies and the tanker did not return to base with excess levels of product. It mattered not to the supplier of "Elgas" that its product ended up with "Gogas" outlets or vice versa. The suppliers' concern, and the value of the respondent's service to them, was that their product had within a given period been most efficiently and economically distributed. This was what his Honour meant when he said, in his reasons, that "the plaintiff did more than just deliver the product. It provided full customer service to [the suppliers]." It is, therefore, not correct to say that his Honour did not, first and foremost, ascertain the "predominant activity" carried on by the respondent before turning to the "industry classifications" to determine which one "most closely corresponded" to that predominant activity.

53. In the light of the evidence before him, it was in my view well open to his Honour to conclude that the industry classification to which the respondent's predominant activity most closely corresponded was the one which he chose - namely F4741J - which included as a "predominant activity" the "dealing with LPG in bulk". For my own part, I cannot see why his Honour was not entitled to attribute to the word "dealing", where used in this classification, its ordinary meaning which would include distribution albeit as the suppliers' agent, but even if the word is to assume, from its context, the flavour of "wholesaling", then it was, in my opinion, open to his Honour to conclude that respondent's predominant activity was such an integral part of its suppliers' wholesaling of LPG that such activity most closely corresponded to the classification which he chose. After all, that was the classification which had been assigned by VWA and its predecessor for the ten preceding years, and the fact that the auditor formed a different view only serves to demonstrate the value judgments which are called into play in applying the methods prescribed by the Premiums Orders in calculating premiums. In circumstances where, as here, the classifications are not "industry specific", the determination of the employer's "predominant activity" is not a "mechanical" one; rather it is a matter of obtaining an impression from the accumulation of detail and making an informed decision from an appreciation of the whole[2]. When one has regard to the competing classifications relevant in this case, it seems to me that his Honour's choice of classification F4741 over G5112K is readily understandable. The latter classification appears to concern itself with the general carriage of freight by those who might be thought to be in the business of common carriers. Whatever else one can say of the respondent's business, it was geared to the specialized carriage of petroleum products, albeit as an agent for its suppliers. Classification F4741J is specific to those who are engaged in the wholesaling of petroleum products. It is, however, part of Division F of Schedule 9 of the Premiums Order which, in its preamble, recites that the Division includes not only workplaces engaged in the trading of goods as a retailer or wholesaler, but also as an agent. The term "agency" is used "to include those operations which trade in goods but do not usually take title to the goods traded and do not physically handle the goods. Typically an agency receives commission or fees which are directly related to the value of goods traded". As it seems to me, these are words of wide general import which, when applied to the specific classification F4741J, explain why a "predominant activity" therein included is one of "Liquified petroleum gas (LPG) dealing (in bulk or in containers)" - a description which, as I have said, is apt to apply to the business carried on by the respondent as a distributor of its suppliers' product. As I see it, the words of the classification adopted by the Order are so wide that they should not be assumed to be descending to the niceties of determining whether the relevant "dealing" is confined to trading with title or property to the goods being dealt.

56. Except where the judge's conclusion can be shown to be patently erroneous, an appellate court will not readily interfere with a decision which has been arrived at by applying value judgments and matters of opinion and impression[3]. For the reasons given, his Honour's conclusion was arrived at by such a process and because, in my view, it is not a patently erroneous decision I would not, for myself, be prepared to interfere with it.

61. What I have said so far is sufficient to dispose of this appeal. In deference to the arguments of counsel, it is desirable that I should, however, say something about the power of the insurer, or VWA, to adjust premiums in respect of past policy periods which have been fixed and paid.

64. As I have previously stated, the appellant's argument is that his Honour was in error in concluding that there was no power to re-calculate and adjust premiums in respect of past policy periods which had been fixed by the insurer and paid by the insured employer. It contends that it is of no consequence that the relevant premiums had been fixed and paid upon a misapprehension that the respondent's appropriate industry classification was F4741J if, on subsequent inquiry, it becomes clear that the correct classification is G5112K. It is submitted that s.17 of the WCIA imposes a statutory obligation on the authorized insurer or VWA to collect the "correct premium" which, ultimately, is to be determined by the court. It calls in aid such authorities as Northwest County District Council v. J.I.Case (Australia) Pty. Ltd.[4] in which the court decided that a supplier of electricity was bound by its statute to recover the cost of electricity supplied in accordance with the rates fixed by statute and that the doctrine of estoppel could not apply to prevent it from doing so. By analogy, the appellant argues that s.17(1) of the WCIA provides that the "premium payable by an employer for a Work Cover insurance policy must be calculated in accordance with the methods specified in the relevant premiums order" and that s.17(2) provides that the insurer "must not demand or receive an amount for the issue or renewal of a ... policy which is different from the premium payable by the employer in accordance with the relevant premiums order". Hence, it is said, a statutory obligation is imposed on the insurer to recover the "correct premium" properly calculated in accordance with the relevant premiums order.

67. I cannot accept this argument. For a start it assumes that s.17 contemplates that there is only one "correct" calculation of a premium so that, even if an insurer has demanded and received from an insured a premium which it has fixed by reference to the methods specified, there is nothing to prevent it from re-visiting the calculation, perhaps years after the event, forming a different opinion from the one previously formed and calling upon the insured to pay the difference. There is nothing in s.17 which, as I see it, leads to such an absurd result. All that s.17 provides is that the insurer is to calculate the premium in accordance with the relevant premiums order and, having done so, to demand and receive only the premium so calculated. The section neither states, nor implies, that there is only one immutably "correct premium" which can be fixed. It could scarcely do so because, as I have been at pains to point out, the methods by which such premiums are to be calculated call for evaluative judgments upon which reasonable minds might differ. The circumstances are very different from cases such as the Northwest County District Council case (supra) where the statutory authority was bound to recover the charge fixed by the statute. This is not to say that the insurer, when fixing a premium for a policy period about to commence, cannot re-visit the question of the appropriate industry classification. It might do so because the methods prescribed by the relevant Premiums Order have altered, or because it has received further information which influences its opinion, or because it changes its opinion. In any of these circumstances, it will be entitled to demand the premium which it has calculated in accordance with the relevant Order. The position of the insured is preserved because, if it does not agree, it has the rights given to it by the Act (s.22), the relevant Premiums Order and the policy to challenge the amount of premium demanded and to call for the premium to be adjusted, and, if not successful, to seek relief from the court.

70. In the alternative, the appellant has submitted that it has a general power to adjust premiums for previous policy periods, and that such general power is to be found in s.26(4) of the WCIA and/or clause 10 and schedule 7 of the relevant premiums orders. S.26(4) of the Act provides:

"The Authority (i.e. the VWA) or the authorized insurer may by notice in writing to the employer at any time after the commencement of the policy period adjust the amount of premium in accordance with the premiums order, and the adjusted amount is the premium for the purposes of this Act."

This, so the appellant argues, is specific statutory power in the VWA and the authorized insurer to adjust at any time, and for any reason, a premium which has been fixed and received in respect of any previous policy period. Such a general power, so it is said, is supported by clause 10 and schedule 7 which appear to be in common form in the relevant Premiums Orders. Clause 10 provides:

"(1) Unless otherwise expressly stated, any determination or calculation required to be made for the purposes of calculating a premium under this order is to be made - (a) in respect of all premiums payable in relation to policy periods commencing on 30 June 1993 - by the Authority; (b) in respect of all premiums payable in relation to policy periods commencing on a day after 30 June 1993 - by the authorized insurer; (c) in respect of all adjustments to the premiums referred to in paragraphs (a) and (b) - by the authorized insurer. (2) An employer may, in accordance with the policy, apply to the Authority for review of, or the Authority may of its own volition review, a determination or calculation made by an authorized insurer under sub-clause 1(b) or (c), and on review the Authority may make any determination or calculation that the authorized insurer may make."

Schedule 7 of the relevant Premiums Orders provides:

"1. Where the authorized insurer or the Authority becomes aware of any new information affecting the calculation of the premium, after the premium payable is calculated, the authorized insurer or the Authority may re-calculate the premium in accordance with this Order and the difference must be met by a further payment by the employer or by a refund to the employer, as the case requires. 2. (1) The circumstances under which an employer may apply under s.22 of the [WCIA] to have the premium adjusted are - (a) where there is a change in industry classification; or (b) where there is a significant change in rateable remuneration. (2) If the employer applies for an adjustment under item 2(1)(a) of this Schedule, the change of industry classification takes effect from the date of application."

It should not be forgotten that these provisions form part of a Premiums Order which has been promulgated for a particular "policy period", and that they do not in terms authorize the VWA or the insurer to demand an "adjusted premium" in lieu of one which has been demanded of, and paid by, an insured employer in a policy period which has expired.

79. Nevertheless it is contended by the appellant that s.26(4) of the WCIA, operating in conjunction with the aforesaid provisions of the relevant Premiums Order, provides to the VWA and the authorized insurer the necessary power to adjust a premium for any reason, and at any time - subject only to the intervention of a statutory limitation period. The argument assumes that the relevant Premiums Order remains in force following the expiry of the policy period to which it applies to enable adjustments to be made to premiums fixed and paid for that period, even though no objections were made within that period to the premiums calculated and paid. The sub-section, so it is said, contemplates that, from time to time, a premium will be calculated incorrectly and thus provides for an adjustment, at any time after the commencement (and, presumably, the expiry) of a policy period, in accordance with the Premiums Order and, once adjusted, the adjusted amount is the premium for the purposes of the Act. It is submitted that the sub-section facilitates explicitly what would otherwise be implied so as to make the scheme of the WCIA workable. It is contended that, even without the sub-section, orthodox legal principle, as well as the terms of the policy as to calculation of the premium, would require the miscalculated premium to be adjusted so the correct legal liability be re-instated. However, it is said that s.26(4) makes explicit what otherwise would be implicit - namely that premiums under-collected or over-collected can and must be recalculated and adjusted, once the relevant mistake in calculation is discovered. Arguing to the contrary of these submissions put by the appellant, respondent's counsel contended that no express power is to be found in the Act to adjust premiums fixed and paid for past policy periods and that s.26(4) does not, and was not intended, to give to the insurer or the VWA such a general power.

82. In my opinion, the appellant's submissions read too much into the scheme created by the WCIA. In general terms the purpose of that Act is to develop a new system of funding the scheme of workers' compensation in this State through premiums paid by employers to authorized insurers. Again in general terms, the rights and liabilities of the employers and the insurers are intended to be governed by the policies of insurance into which they enter, although to some extent those rights and liabilities are influenced by the statutory framework against which the policies of insurance must be interpreted. To this end, s.1 of the Act describes its purpose, inter alia, as transferring the existing liability of the VWA to fund workers' compensation to the authorized insurers and to provide for the levying and collection of premiums pursuant to the policies issued. The policies, so issued and renewed, are to be in respect of "policy periods" which are defined as being a period of 12 months (or such lesser period fixed by the insurer) ending at 4 p.m. on 30 June in any year. Employers are bound to obtain and keep in force a policy of insurance with an authorized insurer provided that the employer "in any financial year has paid or is liable to pay rateable remuneration exceeding the exemption limit" (s.7(1)). "Rateable remuneration" (which, effectively, means the total or aggregate payroll of an employer at its workplace) is an essential component of the methods employed in fixing the premiums and which, as I have previously noted, are to be prescribed in the Premiums Orders published in respect of a policy period. In simple terms those methods establish the premium payable for any policy period by applying an "Industry rate" (calculated by reference to the "industry classification" determined in respect of a given employer) to the "rateable remuneration" of the employer. The policies issued by insurers to employers are required only to contain provisions as are prescribed by the Act or approved by the VWA (s.9). Indeed, so we were informed during the appeal, there is only one form of policy issued, and that has been drafted by the VWA. However, it is only the authorized insurers who can issue or renew a policy (s.10) but they do so under the supervision of the VWA (s.12).

85. Sections 15 to 26 inclusive of the Act deal generally with the fixing of premiums. Sections 15 to 17 deal with "Premiums Orders" and their publication in respect of policy periods. S.17, as I have noted, is the section which requires the premium to be calculated in accordance with the methods prescribed in the relevant Order. Not surprisingly, having regard to its importance in relation to fixing the premium and because it is knowledge primarily in the possession of the employer, the Act descends to some detail with regard to the estimate of "rateable remuneration". Section 23 empowers the insurer, by notice in writing, to require an employer to provide a "certified statement" in an "approved form" of the rateable remuneration paid or payable by the employer to its workers during a specified policy period, and to do so within 28 days of receipt of the notice. Section 18 imposes an obligation upon the employer, under pain of penalty on default, to provide the insurer within 28 days of receiving the notice an estimate of the rateable remuneration paid or payable which the employer estimates that it will be liable to pay during the specified period. In the event that the employer fails to provide the estimate required, or if the VWA considers that the estimate is incorrect, the VWA is empowered to assess for itself the rateable remuneration paid or payable, to calculate the premium payable and to serve a notice on the employer specifying the amount of the premium (s.24). Section 20 then provides for the "revision" of estimates of rateable remuneration in the event of "changed circumstances". Section 20(1) requires the employer to advise the insurer, if it becomes aware of changed circumstances showing that the actual rateable remuneration exceeds or is likely to exceed by more than 20% the estimate of rateable remuneration previously provided or assessed under s.24, of those changed circumstances and to submit a revised estimate within 28 days of so becoming aware. Section 20(2) provides that, if the actual rateable remuneration paid or payable by the employer as at any time before the last two months of a policy period exceeds the estimate provided for the whole of that period, the employer must also advise the insurer and provide a revised estimate within 28 days. Section 21 provides that, in the event of the circumstances specified in s.20(1) or (2) occurring, the insurer or the VWA may issue a notice of adjusted premium. It is in the context of the sections to which I have referred that s.26(1) provides that (save in certain circumstances) "the premium calculated in accordance with this Part is due and payable by the employer at the commencement of the policy period" and s.26(4) provides that the VWA or the insurer "may by notice in writing to the employer adjust the amount of the premium in accordance with the premiums order and the adjusted amount is the premium for the purposes of this Act". (my emphasis)

88. The provisions of the WCIA to which I have referred in [21] and [22] do not, in my view, either expressly or by implication impose an obligation, or confer a power, upon or in an insurer or the VWA to adjust a premium which has been fixed, demanded and paid in respect of a past policy period, and more particularly, do not impose such an obligation nor confer such a power where the adjustment has been made on account of the insurer or the VWA forming an opinion about the appropriate "industry classification" of the employer different from the one which it has previously determined and applied. This, no doubt, is because it is assumed that, unlike rateable remuneration, the determination of the appropriate industry classification is solely within the province of the authorized insurer and is made, or should be made, upon information sought from and given by the insured employer. Indeed the relevant policy stipulates that:

"... whereas the insured ... named in the Premium Notice attached hereto ... is conducting operations at or from the workplace(s) listed in the Notice in respect of which rateable remuneration is paid or payable ... and has provided to [the VWA] or authorized insurer specified in the Notice ... particulars under the [ACA or WCIA] which it is hereby agreed shall be the basis of this contract and be considered as incorporated in this Policy." (my emphasis)

Thus, it seems to me that it is the basis of the agreement between the employer and the insurer that the employer/insured has provided information or particulars to the insurer or the VWA sufficient to enable the insurer or the VWA to determine the appropriate industry classification for a relevant policy period. In circumstances where, as here, the information has been provided bona fide by the employer and accepted by the insurer as sufficient for its purposes to fix a premium, and the parties have thereafter conducted their affairs on the basis of the premium so fixed and paid, it is not open to the insurer to maintain that the premium so fixed and paid was not the appropriate one. In the absence of the clearest statutory language giving to the insurer the right to adjust the premium, it is estopped. Indeed, I did not understand appellant's counsel to argue to the contrary. Their contention is that the clarity of statutory language prevents the estoppel from arising - a contention which I cannot accept. If, of course, the information sought and received from the insured was misleading or deceptive and amounted to what clause 9 of the policy describes as "avoid(ing) or attempt(ing) to avoid the payment of the premium due" by "any wilful act default or neglect or by any fraud, art or contrivance", then that would amount to a breach of the policy within the meaning of clause 22 thereof, entitling the insurer to recover any loss suffered by way of damages.

94. There is, in my view, nothing to be found in the WCIA, the policy or, indeed, in the Premiums Orders, which clearly indicates that there is a right in the insurer to adjust past premiums in the circumstances which exist in this case. Indeed such power to adjust as is specifically given by the WCIA to the insurer or the VWA is limited to the circumstances, which I have described, where defaults have occurred in giving information in relation to rateable remuneration. Even then, as it seems to me, the power to adjust is limited to the policy period in respect of which the adjusted premium is being sought; not past policy periods. That much seems to be clear from the tenor of the statute, and the dispatch which its terms imply, in requiring information from the employer about rateable remuneration in a policy period for which a premium is to be fixed. It would, in my view, be surprising if, in the face of specific statutory powers to adjust a premium in the circumstances contemplated by ss. 18, 20, 21, 23, 24 and 25 of the WCIA, s.26(4) was intending to give a general power to the insurer or the VWA to adjust premiums for past policy periods which had been fixed and paid, and to do so on the basis that the premiums had been calculated upon an "incorrect" industry classification. I agree with his Honour that s.26(4) does not intend to provide any such general power. The sub-section does not specifically invest the insurer or the VWA with any such general power which, if it were to be found within the sub-section, would appear to be inconsistent with, and render unnecessary, the specific powers to adjust found within the preceding sections[5]. In my opinion s.26 is merely providing for the manner and form in which the premiums, calculated in accordance with the preceding provisions of Part 2 of the WCIA, are to be paid for the policy period in respect of which they are being calculated or adjusted. Section 26(1) accordingly provides that "... the premium calculated in accordance with this Part is due and payable by the employer at the commencement of the policy period". Clearly, this cannot be achieved where the VWA or the authorized insurer has adjusted the premium in accordance with ss. 21 and 25 or the employer has disputed the premium and applied for it to be adjusted in accordance with s.22. Hence s.26(4) is necessary to provide for those circumstances and empowers the insurer or the VWA to adjust the premium after the time when, prima facie, it is payable and it is the adjusted amount which becomes the premium for the purposes of the Act. Indeed the whole of s.26 is, to my mind, quite inconsistent with an intention to grant a general power to adjust a premium fixed and paid for past policy periods, because the words used in s.26(1) and (4) are apt only to apply to the current policy period in respect of which a premium is being calculated.

97. The power to adjust the premium given by s.26(4) is a power to adjust "in accordance with the premiums order". However, the terms of the relevant Premiums Orders, to which I have previously referred, do not, I think, advance the appellant's case. Those Orders are, as I have said, made pursuant to the authority of the WCIA and should be interpreted consistently with the Act. Clause 10(1) provides that the determination and calculation of the premiums for the policy period commencing on 30 June 1993 are to be made by the VWA and that calculations and determinations of premiums for subsequent policy periods are to be made by the authorized insurer, as are all adjustments to premiums. Clause 10(2) provides that an employer may, in accordance with the policy, apply to the VWA for a review of, or the VWA may of its own volition review, a determination or calculation made by an insurer. This clause, in my view, is doing no more than re-stating the powers given by the Act and the policy to the VWA, the insurers and the insured employer respectively. The fact that it is couched in permissive, rather than mandatory, language militates against the appellant's submission that the VWA (or the insurer) has a statutory obligation to collect the "correct premium". Likewise, it seems to me that clause 7 of the Schedule is simply providing the machinery, or re-stating the circumstances, in which the VWA or the insurer may re-calculate the relevant premium in the light of "new information", or in accordance with which the employer/insured can apply to have the premium adjusted pursuant to the power invested in it by s.22 of the Act. Once again, the language of the Schedule is permissive and there is nothing in it to suggest that the powers given by the Act to the VWA or the insurer are being enlarged so as to impose an obligation on the insurer or the VWA to recalculate premiums for past years which have been fixed and paid in accordance with the Premiums Orders relevant to those years. Such an interpretation is consistent with the form of sub-clause (2) of clause 7 which provides that any adjustments made upon the application of the employer "takes effect from the date of the application". It would be surprising if the adjustments authorised by the clause were to operate differentially depending upon whether they were in favour of the insurer or the insured. Indeed, I agree with his Honour that, even if one could find in the language of the Schedule a discretion in the insurer or VWA to adjust premiums which had been fixed and paid for past policy periods, that discretion had been irrevocably exercised in favour of the respondent in respect of the 1993/4 and 1994/5 policy periods when the insurer informed the respondent that its adjustment would be "effective only from 1995/6".

100. That leaves only the argument raised by appellant's counsel that, in any event, the appellant should be able to recover the adjusted premium calculated in respect of the 1995/6 policy period. The argument could only have merit in the event that the appellant's submission that the appropriate "industry classification" for the respondent was as a long distance intrastate road freight transporter (G5112K) - an argument which I have rejected. The appellant contends that the evidence before his Honour demonstrates that, in calculating the premium for the 1995/6 policy period, the VWA had reviewed the appropriate classification for the respondent and directed the insurer to fix a premium based on the G5112K classification. It was not a case, so it was submitted, where the VWA was seeking to adjust a premium fixed and paid in respect of a past policy period.

103. The resolution of this problem depends upon the facts. His Honour appears to have taken the view that the VWA did not recalculate the premium for the 1995/6 policy period until July 1996; that is when the policy period had expired. However, the documents placed in evidence before his Honour indicate that, although an "initial premium notice" had been issued to the employer in September 1995 calculated on the basis of an "industry classification" of F4741J, it was supplanted by a further notice in October 1995 in which the premium demanded was in accordance with the "industry classification" G5112K; that is "Long Distance Intrastate Road Freight Transport". It would seem that the insurer's decision to demand a premium in accordance with an "industry classification" different from that which it had assigned in the past was the decision to which the employer objected and which has led to these proceedings. It was, as I have said, open to the insurer and the VWA to calculate the premium in accordance with the "industry classification" which, in their view, was appropriate for the relevant policy period. Equally, it was open to the employer to challenge that classification pursuant to the Act and the terms of the policy. If, at the end of the day, it is determined that the "industry classification" so assigned is the appropriate one, then the insurer would be entitled to claim the premium calculated on that basis. However, in my view, his Honour was entitled to conclude that the classification so assigned was not the appropriate one, and, accordingly, was entitled to give judgment in the manner which he did.

106. For these reasons, I would dismiss the appeal.

111. This appeal concerns the legislative scheme under which employers were required to insure against their WorkCover liability with private insurers, a scheme which was put in place in Victoria on 30 June 1993 and which ended on 30 June 1999 when it was subjected to major changes. The scheme was introduced by the Accident Compensation (WorkCover Insurance) Act 1993 (Act No. 50 of 1993) ("the 1993 Act"): the major changes were made by the Accident Compensation (Amendment) Act 1998 (Act No. 81 of 1998). This appeal focuses on the operation of the scheme for the three years (or "policy periods") ending on 30 June 1994, 30 June 1995 and 30 June 1996, during which the respondent, I.R. Cootes Pty Ltd (to which I shall refer as "the employer" or "the insured"), was insured against its liability under the Accident Compensation Act 1985 ("the ACA") with Q.B.E. Workers Compensation (Victoria) Ltd, an "authorised insurer" under the 1993 Act (meaning an insurer who was the holder of a licence under Part 3 of that Act). From 30 June 1999 such licences were no longer issued; insurers ceased to be "authorised insurers", becoming instead mere agents for the Victorian WorkCover Authority itself. As one incidental result of that change, when this appeal was called on for hearing it was ordered by consent that Q.B.E. Workers Compensation (Victoria) Ltd be removed as an appellant and the appeal was continued by the Authority alone.

115. The appeal is brought against judgment in the County Court which, according to the authenticated order, was given on 27 October 1999[6]. The proceeding had been instituted by the employer, as plaintiff, against the authorised insurer and the Authority, as defendants, and the employer was suing to recover what it claimed was premium overpaid by it to the authorised insurer for the three policy periods, 93/94, 94/95 and 95/96.

118. For the purpose of calculating premium (or "levy" as it had been under the ACA until 30 June 1993), the employer had been accorded the industry classification F4741J - Petroleum Products Wholesaler. During the latter half of 1995, the Authority caused an "audit" to be carried out at the premises of the employer at Seaford and as a result the Authority determined (and, it seems, directed the insurer accordingly) that the correct industry classification of the employer was, and should have been, G5112K - Long Distance Intrastate Road Freight Transport. The new classification attracted a much higher premium than the original one and the authorised insurer purported to give effect to the reclassification by demanding that, for the three years in question, the employer now pay a hefty increase in the premium which had been paid or was otherwise payable.

121. Notification of the change in industry classification took place in stages, however. From the documents in evidence it appears that the "audit" team attended at the employer's premises in September 1995 and the audit was concluded by 12 January 1996. A formal notice, headed "1995/96 Initial Premium Notice" and dated 20 September 1995, had claimed premium according to the industry classification F4741J, but another notice followed, this one headed "1995/96 Initial Premium Notice" and dated 18 October 1995, claiming a greater sum for premium according to the industry classification G5112K. This, it appears, was the first notification of the reclassification. A subsequent letter, dated 30 January 1996 from the authorised insurer to the employer, referred to the "telephone conversation with you on 29th January 1996 where we discussed the change in industry classification from Petroleum Products Wholesalers to Long Distance Interstate [sic] Road Freight"[7]. The penultimate paragraph of that letter read:-

"Based on the above schedule, your industry classification has changed effective from 1995/96 financial year only. You are therefore paying a total premium amount of $91,724.12 based on a rateable remuneration of $4,350,001.00."

On 15 July 1996, the Authority, after noting that the authorised insurer had changed the employer's industry classification to G5112K "effective from 1 July 1995", directed the insurer "to amend the effective date of the change of classification to 1 July 1993", and that direction led thereafter to the first formal notice to the employer that the change in industry classification was being applied to the policy periods 93/94 and 94/95, with consequential demands for more premium for those years.

126. In respect of all three policy periods, the employer formally objected to the demands for increased premium but in the end paid what was demanded of it. It paid under protest and sued to recover what it then contended were over-payments. The employer argued that the revised industry classification, G5112K, was wrong and that anyway it did not justify the demands that had been made for increases in premium. The trial judge agreed. Accordingly, judgment was given for the plaintiff in the sum which the parties agreed was the difference between the total amount paid for premium (both initially or under protest) for the policy periods 93/94, 94/95 and 95/96 and the amount that would have been payable on the basis of the original classification, F4741J. Judgment was given also for interest and costs.

129. The Authority now appeals, seeking to have the judgment recovered by the employer reversed. It contends that the industry classification G5112K was correct and that, that being so, the claims for further amounts for premium were fully justified.

133. As argued, there are three issues for determination. The first is the industry classification of the employer under the premiums order governing the calculation of premium in each of the years in question. Was the classification F4741J, which was first adopted, wrong? If not, the appeal fails altogether, for there could then have been no basis for demanding any further premium over and above that payable according to the original classification.

136. The second issue arises if the original industry classification was wrong and the reclassification G5112K was correct. Did the authorised insurer then have the power under this legislative scheme and the relevant policies of insurance to "adjust" (as it claimed to do first in 1995 and later in 1996) the amount payable for premium in respect of any of the three policy periods in issue, 93/94, 94/95 and 95/96? This "adjustment", being the substantial increase in premium already described, was referred by the insurer to the "audit" that had been done of the employer's business activities and the consequent determination of the "correct" classification.

139. Thirdly, if the insurer did have the power to "adjust" the amount payable for premium as it claimed, was that power exhausted when the authorised insurer notified the employer in October 1995 that, in the light of the information which had come to hand as a result of the "audit", a change in the industry classification was being made "effective from [the] 1995-96 financial year only"? Put another way, was it open to the Authority subsequently (in July 1996) to reverse the determination apparently notified in October 1995 (to adjust premium for the policy period 95/96 "only") and to increase after all the premiums payable for the earlier years 93/94 and 94/95?

143. To a greater or lesser degree all three issues depend for their resolution upon the legislative scheme that was constructed by the 1993 Act; for, as I see it, that scheme was in substance a scheme of private insurance. It is true that the scheme was overlaid with, and subject to, a number of statutory requirements but, in essence, it was designed to bring the employer and an insurance company into direct contractual relations over the liability of the employer in respect of work-related injury or death.

146. It was Part 2 of the 1993 Act which dealt with WorkCover insurance. Its first provision, s.7, obliged an employer in terms to "obtain and keep in force a WorkCover insurance policy with an authorised insurer in respect of all the employer's liability", whether under the ACA, at common law or otherwise, "in respect of all injuries arising out of or in the course of or due to the nature of all employment with that employer on or after 4 p.m. on 30 June 1993", and the employer was forbidden to keep more than one such policy in force at any one time. The obligation to obtain and maintain a relevant policy rested upon any employer who in a financial year paid or was liable to pay "rateable remuneration", meaning remuneration that was subject to a premium within the meaning of s.8, which, broadly speaking, was all remuneration payable in Victoria (unless in respect of services performed or rendered wholly outside Victoria) and remuneration wherever paid if in respect of services performed or rendered wholly or mainly in Victoria.

149. By s.9 a WorkCover insurance policy had to contain only "such provisions as are prescribed by this Act and any other provisions that are approved by the Authority" and by s.10 only an insurer who was an "authorised insurer" could issue or renew a WorkCover insurance policy. The authorised insurer was obliged not to refuse to issue a policy of insurance to any employer (or to renew one) except with the consent of the Authority. Section 13 provided for a certificate evidencing that an employer had a WorkCover insurance policy on a given date or during a given period. Sections 15, 16 and 17 governed the calculation of premium. Sections 18, 19 and 20 dealt with the employer's providing information about rateable remuneration and s.26 declared that the premium calculated in accordance with Part 2 was due and payable by the employer at the commencement of the policy period, although arrangements might be made for payment in instalments.

152. In Part 4 of the 1993 Act, ss.43 and 44 established a statutory fund for each authorised insurer and ss.45, 46 and 47 regulated payments into and out of the fund and its investment. By s.48, a statutory fund maintained by an authorised insurer was to be kept separate from all other assets and s.49 imposed on directors the duties of a trustee. Transfer between funds could be authorised only by the Authority (s.52) and ss.53 and 54 made provision for any shortfall in the insurer's meeting its obligations under a policy out of its statutory fund. Part 6 of the 1993 Act also dealt with the insurer's liability. Section 63 transferred any liability of the Authority for injury to a worker arising from employment before 30 June 1993 to the authorised insurer of the employer and s.64 transferred the liability of an insurer under a WorkCover policy to each subsequent insurer for the time being liable under a current policy. Section 68 provided for the recovery of premium by the Authority but "in addition to ... the rights of recovery by an authorised insurer under a WorkCover insurance policy".

155. These provisions of the 1993 Act are all consistent, it seems to me, with a scheme for what was in effect private insurance for employers against their liability for work-related injury. So, too, the form of policy in use. The documents in evidence at the trial of this proceeding included a form of policy which was headed "WorkCover Insurance Policy" and we were told from the Bar Table that this was in fact the only form of policy approved for use by the Authority under the 1993 Act.

158. The recitals in this policy mentioned s.7 and the obligation thereby created in the employer to "obtain from the authorised insurer, and maintain in force, a policy of insurance that complies with Part 2 of the WorkCover Insurance Act". It was recited, too, that "the insured (in this Policy called 'the employer') named in the Premium Notice attached ... is conducting operations at or from the workplace(s) listed in the Notice in respect of which rateable remuneration is paid or payable...". The recital continued that the insured, so named, -

"has provided to the Victorian WorkCover Authority (hereinafter called `the Authority') or authorised insurer specified in the Notice (in this Policy called `the insurer') particulars under the [Accident Compensation] Act or the WorkCover Insurance Act which it is hereby agreed shall be the basis of this contract and be considered as incorporated in this Policy."

Such a "basis clause" is common enough, confirming the contractual nature of the arrangement evidenced by the policy, and conditions 9 and 22 in particular reinforced the obligations involved. Thus, condition 9 prohibited the employer from, inter alia, avoiding or attempting to avoid the payment of premium due under the 1993 Act or "this policy", "by any wilful act, default or neglect or by any fraud, art or contrivance whatever"; while condition 22 authorised the insurer to recover damages or to deny indemnity upon "a breach by the employer of any condition of the policy".

163. The main burden of the contract, however, was to be found, as usual, immediately after the recitals. It was there provided that "in consideration of the payment of or the agreement to pay by the employer to the insurer the premium stated in the notice appended to this policy", the insurer would indemnify the employer against liability to pay compensation under the ACA or liability at common law for work related injury. It was then "further agreed that the above indemnity is made subject to the due and proper observance and fulfilment by the employer of the conditions hereunder", the insurer to be subject to the WorkCover Insurance Act and "bound by and subject to any judgment, order, decision, award or determination given or made against the employer in respect of the injury or death" attracting compensation or payment within the indemnity. The main portion of the contract concluded:-

"PROVIDED lastly that this Policy shall be subject to the [Accident Compensation] Act, the WorkCover Insurance Act and the regulations and orders made under those Acts and unless the contrary intention appears all words and expressions in the Policy shall have the same meaning as those words or expressions have in those Acts, regulations and orders."

167. The concept of a policy of insurance to cover the employer for its liability for workers' compensation, and in particular a policy to which the terms of the statute are relevant, is scarcely novel; it was employed in relation to workers' compensation up until 1985, and of course in relation to third party liability for injury or death occasioned by motor vehicles. As for workers' compensation, see for example A.M.P. Fire and General Ins. Co. v. Miltenburg[8] and the useful discussion of the relationship between the policy and the Workers Compensation Act 1958 in Hill and Bingeman, Principles of Workers' Compensation, 1981, at pp.170-174. Under the 1993 Act the legislative scheme was perhaps somewhat more elaborate, especially in respect of the calculation of premium; for s.15 authorised the making by the Governor-in-Council of "a premiums order ... specifying the methods to be used in calculating premiums payable by an employer for a WorkCover insurance policy", and in the result a premiums order was made each year, and duly published, for the policy periods 93/94, 94/95 and 95/96. They were largely similar in terms, but they were lengthy and somewhat complicated (including as they did a long schedule of industry classifications). According to s.17(1) the premium payable by an employer for a policy had to be calculated "in accordance with the methods specified in the relevant premiums order".

170. The appellant Authority relied in argument very much upon s.17(2) and it is convenient to set it out now. It provided (and a penalty of 100 penalty units was attached to s.17 generally for non-compliance):-

"(2) An insurer must not demand or receive an amount for the issue or renewal of a WorkCover insurance policy which is different from the premium payable by the employer in accordance with the relevant premiums order."

More will have to be said of this provision later, but obviously it is to be read and understood in context and, as I have said, in my opinion that context is generally one of a scheme for private insurance by employers against their liability for work-related injury.

176. That brings me to the first issue for determination on this appeal: the industry classification of the employer according to the relevant premiums order. I have just mentioned s.17 of the 1993 Act and its effect was reiterated in the policy itself which expressly provided:-

"The premium for this Policy or any renewal thereof is the amount fixed by the Insurance Premiums Order in force under the WorkCover Insurance Act in respect of the relevant policy period."

As already indicated, under the respective premiums orders which were relevant to the three policy periods here in question, the rate of premium depended upon determining the industry classification for the employer's business activities.

181. Some years previously, the Accident Compensation Commission, when in charge of the levy raised under the previous system created by the ACA in 1985, had determined that the employer's industry classification was "F4741J - Petroleum Products Wholesalers (including blending industrial and lubricating oils from refinery base stock)" - to give the item its full title - and the authorised insurer, when it took over under the new scheme in 1993, apparently adopted that classification without questioning it. The employer had first registered for levy as required by the ACA in 1985, declaring in the registration form its "main activity" to be "Distribution of Petroleum Products" and "the major type of goods" as "LPG, petrol, bitumen". It was never suggested - nor has it been now - that that was error. The word "distribution" may, however, have been insufficiently precise to enable an informed choice to be made between on the one hand wholesaling (if that included transportation) and on the other the classification more recently adopted upon review, "G5112K - Long Distance Intrastate Freight Transport". At all events, the authorised insurer, and now the Authority as its successor, claims that the proper classification was not F4741J, but G5112K. The position taken by the authorised insurer, and by the Authority, was that the employer was not wholesaling because it took no title to the product transported and received no payment for the product from the retailers to whom it was delivered; it simply did the delivering.

184. The difference between the two classifications, F4741J and G5112K, however, may not be quite so clear as this last suggests. Schedule 1 to the premiums order is the main concern in this regard. By clause 8 of that schedule (and hence under the policy) the relevant premium rate for any insured depended upon the relevant industry classification (being one from among the many listed in Schedule 9), and that in turn was made to depend upon the "predominant activity" of the insured. According to clause 7, the relevant classification in Schedule 9 was that -

" ... to which the predominant activity for that employer at that workplace corresponds or most closely corresponds".

In clause 3 of Schedule 1 "predominant activity" was defined as being -

"... the activity of the employer which contributes or is likely to contribute more than any other activity to the value of goods or services or goods and services produced or provided by the employer from operations carried on in the workplace."

190. In evidence at trial, Mr. Hatton, who spoke for the respondent, all but conceded in cross examination that the employer "is not a wholesaler of LPG gas" and, while not agreeing that its "main activity" was that of "a long distance road freight transporter", he said that "long distance road transport is one of the activities that [the employer] undertakes in satisfying its contractual obligations between it and its customers", meaning, I think, the suppliers. The employer contended that because of the other services also provided by it in conjunction with transport, its activities, when taken as a whole, most closely corresponded with the classification F4741J, of wholesaling. Those other services included the use of specialised transport vehicles and specially trained drivers; the development of specialised computer services and the regular superintendence by drivers of their customers' needs for product, delivery occurring as and when required according to those needs. There was much more, it was argued, to the overall service being provided than the mere transportation of a product at the owner's direction.

193. In a letter dated 24 April 1997 which was sent on behalf of the employer to the Victorian WorkCover Authority with respect to the dispute over industry classification, the business of the employer was described in some detail. In part that letter read as follows:-

"Within Victoria LP gas is available in bulk quantities at two locations one being at Dandenong and the other at Long Island Point. The actual location makes no difference for our client and shall be referred to as the Bulk Terminal in this explanation. Product is also available from the oil refineries.

Our client I R Cootes Pty Ltd has contracts with a number of Marketers and Oil Companies (Marketers/Oil Companies) with the main ones being Elgas, .... [and] Gogas and the remainder with Mobil, BP, Boral and others.

The distribution of LP gas throughout Victoria and interstate is effected by the Marketers/Oil Companies, i.e. Gogas, Elgas etc. entering into contracts with retail suppliers i.e. service stations etc. (the `outlets') for them to have `outlets' for their particular brand of LP gas. After the agreement between the Marketers/Oil Companies and the `outlets' has been finalised the `outlet' is supplied, by the Marketers/Oil Companies with the necessary tank and discharge facilities. This equipment is not supplied by our client nor do they have any involvement in this area.

Once the facilities are in place the Marketers/Oil Companies i.e. Gogas, Elgas etc. notify our client that this `outlet' is to be provided with the required LP Gas. The notification does not include any mention as to the volume of LP Gas to be supplied nor the frequency of supply. Only that the `outlet' is to be supplied with LP Gas.

Our client has several contracts with the Marketers/Oil Companies for the supply of LP Gas to these `outlets' throughout Victoria. There is no one contract as the numbers of `outlets' is continually being either added to or in some cases decreased as `outlets' close or change the brand of LP Gas.

On receipt of the Marketers/Oil Company's authority to supply their LP Gas to an `outlet' it is our clients responsibility to establish the volume that is to be supplied, the frequency of delivery and the system by which that delivery will take place.

To achieve this our client has to develop and maintain a system that maintains each and every `outlet's' supply at safe levels and ensures that the `outlet' is never unable to meet an order.

This is achieved by the driver of each tanker being totally responsible for the `outlets' within their own nominated/allocated sector. It is their responsibility to be continually in contact with each `outlet' throughout the day to ensure that at the end of the sector at the end of the day each `outlet' has been supplied with the necessary LP Gas and that the tanker is not returning to base with excess LP gas. Each and every driver is totally responsible for the management of the supply of LP gas to all of the `outlets' within their sector.

204. The writers of that letter summed up the employer's case to the Authority in this way:-

"In all aspects other than one our client [the employer] is obviously involved in the wholesaling of LP Gas. They incur liability on the acceptance of a tanker load, they deliver it to `outlets' which resell it to the final consumer and they initiate all of the documentation from which invoices and the transfer of ownership eventuate. The only aspect missing is the actual payment of money to our client by the `outlets'. This situation is one driven more by the advancement of technology where invoices, payment etc. are all raised, transferred and funds transferred via computer based systems rather than a decisive decision to exclude our client from the process. There would be no difficulty nor barrier stopping our client collecting the required payments other than it is a practice which is obsolete, expensive, inefficient and raises unnecessary security risks."

Thus, the argument was not that the employer was a wholesaler, but that the "predominant activity" of the employer most closely corresponded to that described in item F4741J, that of the wholesaler, especially as that classification was labelled "Petroleum Products Wholesalers". As pointed out by counsel at trial, the detail of activities relevant to this item went beyond mere wholesaling; for they were described as including "retailing liquefied petroleum gas (in bulk or containers), heating oil and other fuel oils" and the "Predominant Activities" which were listed included "Liquefied petroleum gas (L.P.G.) dealing (in bulk or in containers)". In contrast, it could be said, item G5112K - Long Distance Intrastate Road Freight Transport, so far as relevant here, appeared to treat of the transporting of goods generally, more in line perhaps with the task of a common carrier than the highly specialised transport operation of this insured.

209. It must be acknowledged that the employer's argument has force; certainly I do not think that the industry classification of F4741J can readily be dismissed as simple mistake on the part of the Accident Compensation Commission in the first place. As I have said, it was not suggested that the employer provided the authorised insurer (or its predecessor) with wrong information, or misled it in any way: in this instance, the insurer, or perhaps more strictly the Authority acting in aid, merely explored the position further for itself, reviewed the classification and came to the conclusion that the classification hitherto adopted had been wrong: it should have been G5112K, not F4741J. And after due consideration I think that the later view was correct.

212. To my mind, the employer's submission tends to underrate the context of the two classifications which are being so minutely examined. The first, item F4741J, occurs in Division F of Schedule 9, headed Trade, and in subdivision 47 which is headed "Wholesale Trade", which, as the employer's submission concedes, is not a wholly accurate description of the insured's activities. It is of the essence of "trading" that title (by which I mean the property in goods) is being passed. It is true that trading may be by principal or by agent, as the introductory clauses of Division F plainly state: and trading as an agent may well mean that the agent does not take title to the goods: see particularly clause 1 under the heading "Division F Trade". But in this context to act as an agent means to engage "in arranging the trade" of or in goods, no doubt for the principal; for the expression "engaged in arranging the trade" of or in goods appears consistently in all items within Subdivision 46, the subdivision which deals with agencies. Thus, where an agent is involved, title may not be taken by the agent itself, but property in the goods is none the less being bought and sold: the trading is by the principal and that trade is arranged by the agent. Importantly, all that is foreign to the activities of the insured in this case. As the quotation in paragraph [51] shows, the employer was not itself trading in the product it delivered, nor was it acting as agent to arrange the trade of its suppliers with the retail outlets; for those outlets were procured by the suppliers themselves. The employer acted simply upon instructions from the suppliers to make deliveries to those outlets as and when required by those outlets. That did not make the employer the trading agent of the suppliers.

215. Much of the argument on behalf of the employer focussed on the word "dealing" as used under the heading Predominant Activities in item F4741J. In the context of Subdivision 47, "Wholesale Trade", I think that even the word "dealing" must be taken to import trading in the property in goods. The word "dealing" appears only once in item F4741J. Otherwise, so far as relevant, this class related to workplaces which were engaged in either "wholesaling petroleum or petroleum products" or "in retailing liquefied petroleum gas (in bulk or containers) ...". The predominant activities listed in item F4741J mentioned wholesaling specifically; only in relation to liquefied petroleum gas was the participle "dealing" used and then only in the phrase "dealing (in bulk or in containers)". To my mind this was apt to include, within the general category of wholesaling, the large bulk retailer; in other words, "dealing" was used to include both wholesaling and retailing if the retailing was in bulk or in containers. What matters for present purposes is that both these involve the buying and selling of property in goods in the course of trade. In contrast, no such thing was involved in the classification G5112K. That item appeared in Division G (of Schedule 9), headed Transport and Storage, and in Subdivision 51 which was headed Road Transport, itself a description well able to accommodate this insured.

218. It may well be that the proper classification of the employer's business activities in this instance can be determined by focussing more closely on the employer's "predominant activity" as defined; for that alone is made relevant (by clause 7 of Schedule 1) to industry classification. It is at least arguable that in this instance the employer's "predominant activity" was transportation: the rest of the services that were provided by the employer, as described in evidence, could surely have been regarded as a gloss upon that principal activity - an extra, if you like, albeit a necessary extra to bring the suppliers to the door. The employer was dealing with the suppliers, the oil producers; it delivered the product to the retail outlets on behalf of the suppliers and in doing so, its "predominant activity" was transportation. If that is correct, then plainly the classification F4741J was wrong. On the other hand, if that is to concentrate too much on the element of transportation at the expense of all else, and if the employer's "predominant activity" was to be assessed in the light of the whole of its business operation, it still followed, in my opinion, that item F4741J was not the correct classification because that item involved trading and trading involved the passing of title (meaning property in goods), whether as principal or as an agent engaged in arranging for the passing of title.

221. For these reasons, I would uphold the Authority's submission that the correct industry classification of the employer was, and should have been in the three years in question, G5112K not F4741J. It is true that the classification G5112K - Long Distance Intrastate Road Freight Transport, as described more fully in Schedule 9, depends upon journeys of "100 km radial distance or more from pick up point", but that aspect was not in dispute so far as I can tell. In evidence Mr Hatton had no difficulty with the term "long distance" and no mention was made of any difficulty with it in argument before us. Indeed, at trial there was evidence that the employer's place of business was in Seaford, where the trucks were based, and that deliveries were to "the Riverina"; and while those deliveries were presumably intrastate not interstate, it was not, I think, contended at any stage of this dispute over classification that the relevant journeys were other than of 100 kilometres or more. Had it been so contended, attention must surely have shifted to the next classification, item G5113L - Short Distance Road Freight Transport; yet that did not occur. The consequences of such a shift need not now be explored. In my opinion the correct industry classification of the respondent was, and should have been during the three policy periods in question, G5112K.

224. Nor do I consider that the doubts and uncertainties obviously attending the meaning and application of the premiums order in relation to industry classification, and particularly Schedule 9, mean that we should refrain from expressing our own conclusion, considering only whether or not it was open to the trial judge - or indeed the authorised insurer or the Authority - to come to a different conclusion. At no stage has this been an application for judicial review of an administrative determination, where the question might well be whether the decision-maker had fallen into reviewable error. At trial this was a common law proceeding brought by the employer for money had and received, in consequence of its having paid under protest the premium demanded by the authorised insurer. The appeal is under s.74 of the County Court Act 1958 which, unlike an appeal under s.52 of the ACA, is not confined to a question of law. It may be said in this case that views could differ over classification, but such is often so where the court is required to determine the proper meaning of a statutory instrument or the proper application of its terms to the facts of the case. Value judgments are not uncommon where the conclusion turns upon the weight to be given to competing factors. But the scheme established under the 1993 Act seems to me to have required a determination of the correct industry classification, and in the first place by the authorised insurer.

(1) Unless otherwise expressly stated, any determination or calculation required to be made for the purposes of calculating a premium under this Order is to be made by the authorised insurer.

(2) An employer may, in accordance with the policy, apply to the Authority for review of, or the Authority may of its own volition review, a determination or calculation made by an authorised insurer under sub-clause (1) and on review the Authority may make any determination or calculation that the authorised insurer may make."

Consistently with this, but adding some detail, condition 10 of the policy provided:-

(i) If the employer claims that the insurer has in demanding a premium, or any part of premium, breached a premiums order, the employer may apply to the Victorian WorkCover Authority for a determination as to the premium to be charged. Such an application must be made within 28 days after the date of demand for the premium;

(ii) Where the Authority makes a determination as to the premium to be charged, the insurer must, within 28 days after the date of the decision by the Authority, issue or renew a policy of insurance for the employer at the premium determined by the Authority;

(iii) Nothing in this clause is intended to abrogate or detract from the rights of either the insurer or the employer to bring proceedings in any court of competent jurisdiction in respect of any matter or thing arising out of a demand, application or determination referred to in sub-clauses (i) or (ii)."

It can be seen that clause 10 of the premiums order uses the word "review", but it was made plain that, on review, the Authority might substitute its own determination or calculation for that made by the authorised insurer, and hence condition 10 of the policy spoke of the employer applying to the Authority "for a determination as to the premium to be charged". Moreover, the power of the Authority to make such a determination was conferred expressly without prejudice to the right of either party to bring proceedings in court - which is what happened here - and in court the question must be the correct industry classification, not whether the determination below was attended by error.

239. As I see it, both clause 10 of the premiums order and condition 10 of the policy emphasise the nature of the scheme as private insurance and both make it clear that the task of determining the industry classification of an insured fell first upon the authorised insurer (if not the Authority) for the purpose of its determining the rate of premium to be applied in calculating the premium to be paid. Section 17 of the 1993 Act required that the relevant premiums order be followed to determine premium, but that task was here being cast squarely, at least in the first instance, upon the insurer not the insured. If the latter had any objection to what was determined by the insurer, the insured might secure a review; and if unsuccessful it might pursue the objection into the courts - much as was done in this instance. That is consistent only with there being but one classification which is correct. For instance, had the classification F4741J been the correct one on this occasion and not G5112K, the employer could surely have insisted (to its advantage) upon its being assessed for premium on that basis and only on that basis. Under this scheme, the calculation of premium depended in large part upon the industry classification and there is therefore no room for allowing that any but the correct classification be determined when a contest erupted. That is not say that a contest must erupt whenever there is room for argument; if the insurer adopted a classification to the advantage of the insured, I see no obligation on the part of the insured to dispute the determination, or even to move to correct it if the insured considered it to be error - so long of course as the insured itself had not induced the error. Clauses 9 and 22 of the policy were doubtless included to protect the insurer against any such misleading on the part of an insured.

242. There was in this case some suggestion on the part of the firm responsible for the "audit" that the employer should have recognised earlier the error attending the adoption of the classification F4741J instead of G5112K and should have moved to correct it, but that is not consistent, I think, with the scheme's being one of private insurance. It was up to the insurer to calculate the premium and make demand accordingly; if the insured disagreed it might object, but it was not bound to do so. (Nor, I might add, do I read s.17 as dictating otherwise.) If the insured made no objection, the matter rested there unless and until, as here, the insurer took it upon itself to review the classification of its own motion or at the instance of the Authority. With what possible consequences is the next issue to be addressed.

247. What, then, were the powers of an authorised insurer to adjust the payment of premium in consequence of a determination by it that the correct industry classification of the employer's activities in the workplace was such as to attract a much greater premium than had hitherto been demanded? The Authority, standing for the authorised insurer, contends that under the 1993 Act the insurer had ample power to alter the premium and to do so retrospectively, and hence its claim for the substantial increases in premium for the three years involved.

250. It argues, first, that under this legislation - and it points in particular to s.17 - there is but one industry classification, the correct classification, of any employer and in consequence there is but one premium, the correct premium, for the policy that issues. Thus far I agree, but the Authority goes further, contending that because it was expressly prohibited by s.17(2) of the 1993 Act from demanding or receiving any but the correct premium, an authorised insurer could recalculate the premium at any time and from time to time, provided only that it was carrying out the statutory imperative, not to demand or receive any but the premium correctly calculated under the scheme as a whole. That (the Authority contends) was what the authorised insurer was doing here: making adjustment in order to rectify what had been done and thereby to ensure that the premium demanded and paid was that properly calculated according to the correct, and the only correct, industry classification. Hence, its demands were authorised by the legislation - indeed, as I followed the argument, they must have been required - and accordingly those demands had to be met.

253. To my mind, the argument leads to an absurdity, for it would allow an authorised insurer to recalculate the premium repeatedly, and no matter how long after the event, simply by reviewing its determination of the employer's industry classification and arriving at a different result. No system of insurance could operate for long on such a basis, particularly one dependent, as we have just seen, upon a careful assessment of the facts (the employer's activities) and the law (the proper construction of the terms of the relevant premiums order in the context of the statute). The employer, for instance, would never have known with finality what its outgoings were in respect of the required insurance and the possibility of dispute over the calculation of premium could have been unending. I reject therefore the submission on this appeal that the authorised insurer had such power as was claimed and was on that account free to recalculate the premium and recover any increase from the employer upon determining for itself, and over objection, that the correct industry classification of the employer was, and always should have been, G5112K not F4741J. That the authorised insurer had such power, and was purporting to exercise it, was the principal submission of the defendants below. It was rejected then and I think that it should be rejected again. Certainly s.17 required that premium be calculated according to the relevant premiums order but that section said nothing about the consequences of a misapplication or a misunderstanding of its terms. There was a penalty imposed for default, but no provision for adjustment.

256. Whether the authorised insurer had power to increase premium in the light of its reclassification of the employer's business activities must ultimately depend upon the terms of the relevant policy when read and understood in the context of the legislative scheme controlling its existence. Under the general law, and subject always to statute, a contract of insurance operates in much the same way as any other contract and so, once made, it cannot be re-made without agreement by all parties. Ordinarily, the insured will apply for the insurance: the insurer considers the application, offers its terms and strikes a premium; and upon agreement being reached, which is generally signified by payment of the premium so struck, the bargain is in place. Saving misrepresentation, fraud, and nowadays I suppose misleading or deceptive conduct, the contract remains on foot for the agreed period of insurance and during that time the premium, once demanded and paid, cannot be re-calculated, "adjusted" or otherwise altered by either party to the prejudice of the other. It is against that background that in my opinion the problem here should be approached, given, as I have said, that the 1993 Act put in place a system of private insurance, albeit subject to the provisions of the statute and the regulations (including the premiums orders) made under it.

259. It follows that, unless there was some special provision justifying it, the reclassification of the employer's business activities by the authorised insurer - albeit that that reclassification attracted a higher premium - carried with it no immediate power to do otherwise than apply that reclassification in calculating premium for the future. Presumably even that depended upon notification to the insured, which was possibly otherwise entitled (and I do not decide it) to proceed upon the assumption that its classification remain unchanged. In respect of the policy periods 93/94 and 94/95 the periods of insurance were well and truly past by the time of the "audit" in 1995 and the Authority's direction to the authorised insurer (in July 1996) that the reclassification to G5112K be applied and premiums increased for those years. As for what was in the policy, the 1993 Act itself or in any premiums order made under the statute, which might have justified the increasing of premium for past years because of an industry reclassification so arrived at, two provisions in particular were relied upon on this appeal. First, there was clause 1 of Schedule 7 of the premiums order, which related to "new information". Secondly, there was s.26(4). As will appear, neither seems to me to justify the power now claimed to re-visit past years.

262. I turn first to s.26(4) and, as always, the context is important. Appearing in Part 2 of the 1993 Act, it was one of a series of sections dealing with rateable remuneration. Section 18 required that an estimate of rateable remuneration be provided upon notice to that effect from the authorised insurer. I pass by s.19, for that was transitional. Under s.20, the employer was bound to submit a revised estimate of rateable remuneration if, as a result of changed circumstances, the employer became aware that actual rateable remuneration paid or payable was likely to exceed the estimate by more than 20 per cent, or if the actual rateable remuneration paid or payable by the employer did, at any time before the last two months of a policy period, exceed the estimate previously given. Section 21 then authorised an adjustment of premium if "the circumstances specified in sub-section (1) or (2) of s.20 apply". Both subsections were dealing, quite plainly, with events within a policy period.

265. Section 22 expressly authorised an employer to apply to the authorised insurer for the premium to be adjusted, although this could be done only "subject to and in accordance with the premiums order". (The relevant provision in the premiums order was clause 1 of Schedule 7 and I shall be referring to that shortly.) Section 23 required the employer, upon notice by the insurer, to provide a certified statement of rateable remuneration paid or payable by the employer during a specified policy period and s.24 authorised assessment by the Authority should an employer fail to provide an estimate when required to do so under s.18. Additional premium could be levied under s.25 by way of a default penalty for non-compliance with s.18, 19, 20 or 23. Again the sections were dealing with rateable remuneration for a given year, suggesting some immediacy.

268. That is the context in which s.26 appears, it being the last section in Part 2. By sub-s.(1), the premium calculated in accordance with Part 2 "is due and payable by the employer at the commencement of the policy period". Section 26(2) enabled an employer to elect to pay the premium by monthly instalments in arrears or by quarterly or annual instalments in advance "in accordance with the premiums order". Deferment was possible under s.26(3). Then by s.26(4) adjustment was authorised in these terms:-

"(4) The Authority or the authorised insurer may by notice in writing to the employer at any time after the commencement of a policy period adjust the amount of premium in accordance with the premiums order and the adjusted amount is the premium for the purposes of this Act."

272. It is significant that this subsection authorised adjustment "by notice in writing to the employer at any time after the commencement of a policy period". The reason lay, I think, in s.26(1), providing that the premium for a policy period "is due and payable ... at the commencement of the policy period". If that was so, then presumably, under the general law, it could be argued that the bargain, resulting in the contract of insurance, was struck at the commencement of the policy period and alteration thereafter, whether to the amount of the premium or anything else already determined, could be effected only by agreement. Hence the need to provide by s.26(4) a power to adjust notwithstanding the commencement of the policy period. Adjustment was, however, authorised only "in accordance with the premiums order". Grammatically, this phrase qualified the verb "adjust" and so, for the details of the power vested in the insurer by s.26(4), one is referred again to the premiums order.

275. That construction of s.26(4) leads me to reject one submission made on behalf of the Authority on this appeal. I do not read s.26(4) as conferring a general power to adjust the amount of the premium in order to bring it into line with the reclassification of the employer's activities. Section 26(4) does not authorise the insurer to adjust the amount of the premium in order that the premium be in accordance with the premiums order: it authorises adjustment in accordance with the premiums order. Section 26(4) therefore does not in itself authorise adjustment merely by reason of the reclassification, even if that reclassification meant that the premium so far demanded and paid was not "in accordance with the premiums order". It is a narrower power: it is a power to adjust "in accordance with the premiums order".

278. Thus, like s.22, s.26(4) directed the reader to the premiums order in the search for the power now claimed by the Authority for the authorised insurer. Section 22, it will be recalled, authorised the employer to apply to the insurer for adjustment of premium "subject to and in accordance with the premiums order " and s.26(4) conferred power on the insurer to make an adjustment "in accordance with the premiums order". Both take the reader then to Schedule 7 which was headed "Revised Premium". That schedule contained only two clauses which were as follows:-

"1. Where the authorised insurer or the Authority becomes aware of any new information affecting the calculation of the premium after the premium payable is calculated, the authorised insurer or the Authority may recalculate the premium in accordance with this Order and the difference must be met by a further payment by the employer or by a refund to the employer, as the case requires. 2. (1) The circumstances under which an employer may apply under section 22 of the WorkCover Insurance Act to have the premium adjusted are-

(a) where there is a change in industry classification; or

(b) where there is a significant change in rateable remuneration.

(2) If an employer applies for an adjustment under item 2(1)(a) of this Schedule, the change of industry classification takes effect from the date of the application."

285. Clause 2, it will be seen, authorised application by the employer for adjustment under s.22. It is significant, I think, that where the employer applied for an adjustment, "the change of industry classification takes effect from the date of the application", and not before. That is at least consistent with the pattern that I have already suggested: that an alteration to classification could operate for the future, but was not to operate for the past. But was clause 1 of Schedule 7 consistent with that pattern?

288. Clause 1 authorised adjustment whenever the insurer "becomes aware of any new information affecting the calculation of the premium after the premium payable is calculated". If it is borne in mind that, by virtue of s.26(1), premium became payable at the commencement of the policy period, it can be said that clause 1, in authorising plainly enough an adjustment to premium after the commencement of the policy period, was authorising the adjustment to be made after the time at which it might otherwise be proper to regard the contract as having been finally agreed. Re-calculation of premium was being permitted in the circumstances set forth in Schedule 7 and any difference had to be met by a further payment or by a refund, as the case required. In this case, the insurer relied, it was claimed, upon "new information" constituted by the auditor's report leading to its determination that the classification hitherto applied to the insured was wrong and that its correct classification was otherwise. Perhaps it was arguable that this was not "new information" within the meaning of clause 1, but no point was taken of that on the appeal: the appeal was argued upon the basis that the judge's conclusion, that there was in this case "new information" within the meaning of clause 1, was not in contention.

291. But what then was the power to make adjustment which was created by clause 1? Was the power one which was exercisable at any time, no matter how long after the conclusion of the relevant policy period? To my mind, there is no justification for reading clause 1 as conferring such an extraordinary power. It may be that in relation to a current policy period, clause 1 enabled the insurer, or indeed the Authority, upon becoming aware of new information affecting the premium payable within a policy period to alter the premium payable for that policy period, notwithstanding that premium had already been demanded and paid. It may be that, despite the payment of premium already demanded, clause 1 would have enabled adjustment to be made for the whole of a current policy period, and not simply for the unexpired portion of it; but that does not fall for decision . In relation to the years 93/94 and 94/95, we have to decide whether clause 1 of Schedule 7 permitted the insurer, well after the expiry of a policy period, to re-visit the scene and to adjust, upwards, the premium that had previously been demanded and paid for the expired period. I see no reason to read such a power into clause 1: the words do not require it and nothing, in principle, would seem to me to justify it, given the general context of this legislative scheme[9].

294. In the case of the 95/96 policy period quite different considerations obtain. It will be recalled that notification of the reclassification was first given to the employer in October 1995, and in the submissions which were made below it was accepted by the employer (then the plaintiff) that that notification was given before any premium was otherwise demanded or paid for the 95/96 year. That was confirmed by the Summary of Facts put before us by the parties on this appeal. (I mention this because in his reasons for judgment the trial judge expressed himself as uncertain on the point and any such uncertainty has now been removed.) Given that that was the position in the 95/96 policy period, I see no reason why the reclassification, determined upon late in 1995, should not have been effective for the 95/96 year by reason of the operation of s.26(4) in conjunction with clause 1 of Schedule 7. I do not decide whether that subsection and that clause would have justified an increase in premium even for the current policy period after premium had once been demanded and paid; that is not this case and I say nothing about it. Here, and for whatever reason, no contract had yet been finalised for that year and if the insured did not agree with the reclassification it had only to seek review, or indeed to pay under protest. As I said earlier I think that its challenge to the reclassification should now fail on the facts, but I see no reason why the insurer did not have the power to act upon the reclassification in striking the premium for the 95/96 policy period.

298. The conclusion being thus far that the authorised insurer had no power to adjust premiums that had been demanded and paid for years ending on and before 30 June 1995, it is unnecessary to canvass the third issue on this appeal: whether the power to make adjustment was exhausted by the notification given in October 1995, which included the statement that adjustment was being made only for the current year.

302. For these reasons, my conclusions are as follows:-

(1) The industry classification of the respondent as F4741J was not the correct classification: the correct classification was, during the three policy periods in question, G5112K.

(2) In relation to the policy period 95/96, the authorised insurer notified the employer of the reclassification and its consequences on premium before any premium was demanded or paid for that period and therefore in time for it to be acted upon. Having demanded the premium according to what it considered to be the correct classification, the authorised insurer was entitled to be paid the increased premium and the respondent was not entitled to recover any part of the premium paid for that year.

(3) In respect of previous years, if, as decided below, the reclassification proceeded upon "new information" within clause 1 of Schedule 7 of the relevant premiums order, the authorised insurer was none the less not allowed to recalculate premium for past years: neither s.26(4) nor Schedule 7 clause 1 gave it such power. Section 26(4) authorised adjustment only "in accordance with the premiums order " and Schedule 7 clause 1 is concerned only with the policy period during which the premium is being recalculated.

308. Accordingly I would uphold the judge's decision that the employer, as the insured, could recover premium demanded and paid under protest for the policy periods 93/94 and 94/95, but not for the year 95/96. The insured was obliged to pay the premium demanded for that year and I would allow the appeal and vary the judgment given below in order to give effect to that conclusion.

313. I have had the advantage of reading the reasons for judgment prepared by Phillips J.A. I agree with his Honour's conclusions that the employer, as the insured, can recover the adjusted premium demanded and paid under protest for the policy periods '93/94 and '94/95 but that the insured should pay the premium demanded for the year '95/96. Subject to the following comments I also agree substantially with the reasons given by Phillips J.A. for these conclusions.

316. The appellant submitted in this Court that under the relevant premiums

orders, and having regard to s.17 of the Accident Compensation (WorkCover Insurance) Act 1993, there could be only one correct industry classification and, accordingly, only one correct premium. In my view the premiums orders do not necessarily contemplate that only one classification can be the correct one. Rather there will, as the President has said, be occasions where minds can reasonably differ. In that situation it becomes the task under clause 10 of the premiums orders for the years in question, first, for the authorized insurer to select the appropriate industry classification. If the insured objects that the selection has been wrongly made, a review may be sought under clause 10(2). But then it would be for the insured to show that the selection had been wrongly made by the authorized insurer (or the Victorian WorkCover Authority, "VWA"). The insured would have to establish that another activity contributed or was likely to contribute more than the assigned classification to the value of goods or services produced or provided by the insured from operations carried on in the workplace. And if the insured could show no more than that two classifications were equally open, the review would fail, the onus of proof being of course on the insured. The present appeal, in my view, is an example of such a situation.

320. The first issue is whether the industry classification originally assigned under the premiums orders to the respondent's business (F4741J - Petroleum Products Wholesaler) was incorrect, and whether the correct classification, as the appellant now insists, was G5112K, appropriate to long distance intrastate road transport. Clause 7 of Schedule 1 to the WorkCover premiums order 1993-1994 (and the clause was in the same terms for the like premiums orders for the following years) provided -

"The industry to which a workplace is classified for an employer is the WorkCover industry classification in Schedule 9 to which the predominant activity for that employer at that workplace corresponds or most closely corresponds."

In clause 3 of Schedule 1 the "predominant activity" in relation to a workplace of an employer is said to mean

"the activity of the employer that ... is the activity of the employer which contributes or is likely to contribute more than any other activity to the value of the goods or services and services produced or provided by the employer from operations carried on in the workplace."

Schedule 9 set out the detailed WorkCover Industry Classification. There is a large number of such classifications. The item numbered F4741J appears under Division F, Trade, whereas items G5111J and G5112K appear under Division G, Road Freight Transport. Clauses 1 and 2 of Division F provided -

"1. This Division includes all workplaces predominantly engaged in the trading of goods either as a retailer, wholesaler (physically handling the goods and, usually, taking title to the goods) or as an agent or purchasing, marketing or buying office. The term 'agency' is used here to include those operations which trade in goods but do not usually take title to the goods traded and do not physically handle the goods. Typically an agency receives commission or fees which are directly related to the value of goods traded. A purchasing, marketing or buying office is a separate workplace, of a multi workplace employer, which is predominantly engaged in buying or marketing goods for use by other workplaces of the employer. Such an workplace which buys or markets for other workplaces of the employer does not physically handle the goods. 2. The term 'wholesale trade' is used here in the broad sense to include the sale (as principals) of new or used goods to retailers or other wholesalers. The more important types of businesses engaged in wholesale trade are wholesale merchants who take title to the goods they sell; separately located sales branches or sales offices (not being retail stores), operated by manufacturing enterprises, which do not merely take orders but supply goods to customers from stocks physically held at their own premises."

In Division F, under the heading "Minerals, Metals and Chemicals Wholesalers" there appears -

"F4741J PETROLEUM PRODUCTS WHOLESALERS (INCLUDING BLENDING INDUSTRIAL AND LUBRICATING OILS FROM REFINERY BASE STOCK) This class consists of workplaces predominantly engaged in wholesaling petroleum or petroleum products or in retailing liquefied petroleum gas (in bulk or containers), heating oil or other fuel oils. This class also includes workplaces predominantly engaged in blending industrial or lubricating oils from refinery base stock. EXCLUSIONS/REFERENCES: Workplaces predominantly engaged in distributing liquefied petroleum gas through a mains system are included in Class D3620V. Predominant Activities Bitumen wholesaling Lubricating oils blending Crude oil wholesaling Oils or greases, industrial or Crude petroleum wholesaling lubricating, blending Diesel oil wholesaling Oils or greases, industrial or Distillate wholesaling lubricating, wholesaling Fuel oil wholesaling or retailing Paraffin wholesaling Heating oil wholesaling Petrol wholesaling Kerosenes wholesaling Petroleum products wholesaling Liquefied petroleum gas (LPG) dealing (in bulk or in containers)"

In Division G, under the heading "Road Freight Transport (Including Renting Vehicles With Drivers)" appear the two separate classifications, G5111J - Long Distance Interstate Road Freight Transport) and G5112K - Long Distance Intrastate Road Freight Transport, which cover workplaces predominantly engaged in the transportation of freight by road across or within State or Territory borders involving journeys of 100 kms or more radial distance from pick-up point.

331. The trial judge had before him the evidence that the respondent in filling out the Employer Registration Form had described its main activity undertaken at its premises at Pascal Road, Seaford, as "Distribution Of Petroleum Products", the major type of goods or services being "LPG, Petrol, Bitumen". The appellant certainly did not suggest that this description was false. Evidence was given by Mr Hatton, the respondent's company secretary, that the respondent conducted a tanker business operation, involving bulk loading, carrying and unloading of petroleum product. He said that the respondent's customers were petroleum product suppliers, such as Elgas, Shell and Mobil. The customers of those suppliers were service stations or commercial customers such as a chicken farm, a hospital or a dried food business. He said that in 1995, the respondent did not have any facilities for storing LPG at the Seaford premises. It had a garage and a truck wash. There was also an office and an underground petrol bowser from which trucks were fuelled. The respondent had contracts for the cartage and delivery of LPG and bitumen, and part of a contract was to carry the products to the customers of the oil companies, and to provide "total customer management". Mr Hatton said that the customers of oil companies, for example, service stations, would pay the oil companies for the LPG delivered by the respondent to them. The respondent did not hold itself out as a supplier of LPG, it was not an oil company. He said that "total customer management" involved taking full responsibility for the logistics of the respondent's oil company customers, and involved taking orders from the customers of oil companies direct, collecting fuel from an oil company and delivering to a range of customers, and transmitting the details of all deliveries back to the oil companies so as to permit them to invoice their customers. The respondent's remuneration then came from the oil companies and was on an all-inclusive cents-per-litre-delivered basis. The respondent's total revenues annually were $10-$12m., of which very close to all was revenue from the oil company customers for whom the respondent was doing deliveries. He said that the oil company customers were themselves all marketers or manufacturers and marketers of petroleum products "to the world". The revenues derived by the respondent from the oil companies was the value of the "total customer management" package for which the respondent was rewarded. The respondent did not take title to petroleum products, and did not buy or sell them. There had been no material change since 1993 until the present time in the nature of the business. Mr Hatton accepted that one of the activities carried out by the respondent in satisfying its contractual responsibilities was long distance road transport.

334. Included in the somewhat skimpy material in the court book before the judge was a very detailed letter from the respondent's agent, Chris Knight & Associates Pty. Ltd. to the VWA dated 24 April 1997 which described in detail the operations of the respondent, in a manner consistent with the oral evidence of Mr Hatton. The substance of this letter was as follows. In Victoria LPG is available in bulk quantities in two locations, one at Dandenong and the other at Long Island Point. The distribution of LPG in Victoria and interstate was carried out by the oil companies entering into contracts with retail suppliers (such as service stations), who were in turn supplied with tanks and discharge facilities by the oil companies. The respondent would then be notified that the particular outlet was to be supplied with LPG. It then became the responsibility of the respondent to establish the volume to be supplied, the frequency of delivery and the system by which that delivery would take place. To ensure that each outlet was fully supplied at safe levels, the driver of each tanker then became totally responsible for the outlets within his sector, such responsibilities being owed both to the oil companies and the outlets.

337. The letter continued that the actual method of distribution was that the tanker driver would collect from the bulk terminal a load of 40,000 litres of LPG. The load would then become "generic", say Gogas or Elgas, when the driver completed the documentation at the loading point. But the driver remained thereafter entitled to choose to whom his load of LPG should be delivered, e.g. some to Gogas, some to Elgas, and some to BP or Mobil outlets. The respondent was also required to take responsibility for payment, for any shortages in delivery, any spillages or leakages, or any public liability. On return to Dandenong, the driver would submit all the documentation to office staff who would then input the data into the relevant oil company's database, and which would then electronically transfer the invoice to the outlet.

340. Accordingly the case made for the respondent in this letter was that the respondent undertook a classic agent's role in arranging the trade of another's product, in this case LPG, for a commission or fee, although it actually handled the product involved. In so doing it -

(a) initially accepted and incurred liability for the LPG;

(b) on direction supplied it to a range of outlets;

(c) was responsible for the design, management and maintenance of the system for distribution;

(d) initiated all of the documentation for verification of delivery and the raising of invoices;

(e) undertook significant responsibility on behalf of the companies whose product was involved;

(f) had invested heavily in developing a specialty service;

(g) had contractual responsibility with both the oil companies and the outlets; and

(h) was required to ensure that the product complied with specifications and was of merchantable quality.

346. On the basis of this evidence the respondent's counsel argued before the trial judge that under the premiums orders the insurer was to determine, year by year, the appropriate industry classification, accepting that there would necessarily be grey areas. Counsel put it that in 1993 the respondent was in the business of interstate as well as intrastate road transport, but claimed (as I follow his argument) that the classification actually given in 1993 was also correct, so that the insurer could have chosen any of these classifications.

349. On the question whether the premium actually demanded was arrived at on the wrong footing, the judge briefly reviewed the evidence given by Mr Hatton, and after referring to the Concise Oxford Dictionary, concluded that the respondent's principal activity was "LPG dealing in bulk". Accordingly his Honour held that WorkCover had correctly determined the plaintiff's industry classification in 1985, and that the premium had not been incorrectly demanded since.

352. The word "wholesaler" is generally used to refer to a merchant who deals either in bulk or who sells to another who sells again, in contradistinction to another (the retailer) who sells to the ultimate consumer. In Treacher v. Treacher[10] Bacon V.C. said that

"[A]s a general rule, 'wholesale' merchants dealt only with persons who bought to sell again, whilst 'retail' merchants dealt with the consumers."

In D'Oro v. The Superintendent[11], Bray C.J. said that "the word 'wholesale' is capable of two relevant significations, one as meaning simply sales in bulk, the other as meaning sales to retailers, presumably also normally in bulk". These two meanings of the word "wholesale" were also noted by Walters J in Lonie v. Willmott[12] and Gobbo J. in City of Brighton v. Eura Nominees[13]. In Attorney-General (ex rel. Franklins) v. Lizelle[14], Reynolds J.A.[15] and Samuels J.A.[16] took the view (quoting from a definition of "wholesaler" settled by the American Marketing Association in 1963) that the meaning of the word "wholesaler" in the community was -

"A business unit which buys and re-sells merchandise to retailers and other merchants and/or industrial institutional and commercial users but does not sell any significant amount to ultimate consumers."

"wholesale is to sell in the manner customarily adopted by wholesale enterprises, even though the purchasers can include ultimate consumers."

In Woolworths v. Campbells Cash and Carry Pty Ltd[18] Bignold J. canvassed the differing views expressed in Lizelle and then quoted the definition of "wholesale trade" adopted by the Australian Standard Industrial Classification Catalogues number 1201 and 1202 which stated that the -

"term 'wholesale trade' is used here in the sense to include the resale (as agents or principals) of new or used goods to retailers or other wholesalers, or to institutional (including government), professional or other business users (including farmers and builders) ..."

This definition of course accepts that a party could be engaged in wholesale trade as an agent as well as a principal.

363. Turning to the relevant premiums orders it is evident from clauses 1 and 2 of Division F that the division includes all workplaces predominantly engaged in the trading of goods as a retailer, wholesaler or agent. Clause 1 makes it clear that a wholesaler need not necessarily take title and wholesaling may be carried out as an agent. The agent, it is said, typically receives commission or fees directly related to the value of the goods traded. To these considerations can be added the general knowledge that many wholesalers and retailers provide their own delivery services, frequently travelling long distances throughout Victoria to their customers.

366. When one turns to the matters specifically mentioned under the heading "Predominant Activities" in classification F4741J, various petroleum products are referred to, in most cases with the word "wholesaling" appended. In the case of LPG, however, a different word "dealing" is used and a first question is why the framers of the premiums order chose to use that word. The Oxford English Dictionary includes as a meaning of the verb "to deal", "to carry on commercial transactions; to do business, trade, traffic." The verb "deal" can, of course, be used in the sense of buying or selling goods, as is demonstrated by Ex parte Rogerson[19] and R v. University Motor Auctions[20]. But I should have thought that the principal meaning of the verb would ordinarily be the first given in the Oxford English Dictionary, namely "to divide, distribute, share." For example in Allan v. Sharpe[21] Alderson B., during argument, remarked that "the strict definition of 'dealing' is 'distributing'. A dealer is one who distributes." Given that it is well recognised in the authorities that the word "wholesale" connotes also a reference to sales in bulk, the reference in classification F4741J to LPG dealing (in bulk or in containers) raises, it seems to me, a difficult question whether this classification was intended to cover amongst its activities the distribution of LPG in bulk.

369. A reading of clauses 1 and 2 of Division F of the premiums orders shows, as I have said, first that the "wholesaler" contemplated by the draftspersons as the principal need not necessarily take title to the goods. Secondly, the classification covers a person acting as an agent for the principal wholesaler. Thirdly the term "agent" is there used to include one who does not take title and does not handle, although I do not read clause 1 of the classification as excluding from the definition of "wholesaler" an agent who does not take title to the goods but does handle them. One possible construction of clauses 1 and 2 of Division F suggests that for industries within this division the workplace is assumed to be static, and thus to exclude an entity whose principal business is transportation. But this inference is less easy to draw when the opening paragraphs of Division G and classifications G5111J and G5112K are examined.

372. The facts in evidence before the judge did not in my view lead to any clear resolution of the issue which of the previously mentioned classifications could be called the more correct, having regard to the definition of "predominant activity" in clause 3(1) of Schedule 1. I do not think that the fact that one of the principal activities of the respondent was long-distance road transport necessarily provides the answer. The oil companies for whom the respondent delivered LPG would presumably fall within the definition "wholesaler" under classification F4741J. But the respondent was authorized by these oil companies to determine which outlets should receive the load its drivers were carrying at any particular time and, although the respondent did not take title, it was plainly authorized to decide to whom quantities of LPG should be sold and, in making that decision, to confer title. In this respect it was, in a sense, acting as the wholesaler's agent and plainly distributing LPG in bulk. For all the various activities referred to in [6] above, the respondent was paid a rate comparable to a commission per litre of LPG delivered.

375. Little attention was paid in evidence to the actual distances travelled by the respondent's tankers or to the question which activity contributed most to the respondent's remuneration. LPG was picked up by the respondent either at Dandenong or Long Island Point. Some proportion of the LPG was then delivered within the metropolitan area although the evidence did not disclose what was the percentage loaded in Dandenong or delivered within the metropolitan area. Dandenong is, of course, only 30 or so kilometres from Melbourne itself.

378. In all these circumstances it is no easy matter to decide which was the more correct classification, or whether any could be said to be the "only" correct classification, had it been necessary to do so. Such a task, to use the President's phrase, is one upon which reasonable minds can or might reasonably differ. But I have already indicated my agreement with the reasoning of Phillips, J.A. leading to his conclusion that the authorized insurer had no power to adjust premiums that had been demanded and paid for the years ending on or before 30 June 1995. As to the 1995/96 policy period, I agree with Phillips, J.A. that notification of reclassification, given in October 1995, was made before any premium was paid, or even demanded, for the 1995/96 year, and accordingly before any contract had been finalized for that year. It was then open to the insured under the 1993 Act to seek reclassification or pay under protest. But in my view the challenge to the reclassification as to this year fails, not because F4741 is the only correct classification, but because the respondent, before his Honour, was unable to discharge the onus of establishing that G5112K was not a correct classification, for the reasons given in [1] above.

381. I would allow the appeal only to the extent necessary to confirm that the insured must pay the premium demanded for the year `95/96.

[1] Warren v. Coombes [1979] HCA 9; (1979) 142 C.L.R. 531 at 551.

[2] cf. Hall (Inspector of Taxes) v. Lorimer [1992] 1 W.L.R. 939 at 944.

[3] Mobilio v. Baliotis [1998] 3 V.R. 833 at 841-2 per Brooking, J.A.

[4] [1974] 2 NSWLR 511.

[5] cf. The Commonwealth v. Baume [1905] HCA 11; (1905) 2 C.L.R. 405 at 414 per Griffith, C.J.

[6] The notice of appeal describes the judgment as given on 29 October 1999.

[7] The reference to interstate transport arose from a mistake by the "auditors", a mistake they corrected before premium was adjusted. In his reasons for judgment the trial judge thought the mistake a significant one; on this appeal the parties were agreed that it had no significance in the events which happened.

[8] [1982] 1 N.S.W.L.R. 393 (P.C.).

[9] This is at least in line with the original notification to the insured, in October 1995, of the change in the industry classification "effective from [the current policy period] only". See also and compare under the previous legislation the decision of the Full Court in Peter Isaacson Publications Pty. Ltd. v. VWA (formerly ACC) [1996] VicRp 6; [1996] 1 V.R. 49.

[10] (1874) WN 4.

[11] [1968] S.A.S.R. 220, 224.

[12] [1996] S.A.S.R. 368 at 371.

[13] (1983) 56 LGRA 262 at 269.

[14] [1977] 2 N.S.W.L.R. 955.

[18] (1993) 80 LGERA 104 at 110-111.

[19] (1888) 9 L.R. (N.S.W.) 30 at 40, 43

[20] [1961] N.S.W.R. 1091, at 1096 - 1097.

[21] (1848) 17 LJEX 209 at 210.